78: Can you move abroad with debt? Here’s the truth.
Can You Move Abroad with Debt? Here’s the Truth
When you’re thinking about moving abroad, one question often comes up:
“Can I move abroad if I have debt?”
Maybe you have student loans, credit cards, or personal loans. It can feel like a huge roadblock. If you’ve ever wondered, “Do I need to be completely debt-free before moving abroad?”, this post is for you.
Here’s the good news: You can absolutely move abroad with debt. It just takes some planning. Let’s dive into what that looks like.
Debt is Normal—You’re Not Alone
First, let’s clear something up: you are not alone. Many people, especially Americans, carry debt. It doesn’t mean you are irresponsible or that you have failed.
In fact, for many, debt comes from necessary life expenses—education, transportation, or even healthcare. If you feel shame about your debt, take a deep breath. It’s okay.
Wanting to move abroad doesn’t mean you’re ignoring your financial situation. Instead, it means you’re working toward a better future.
Know Your Debt
Before making any big decisions, start by getting a clear picture of what you owe. Different types of debt need different strategies:
- Student loans: Often manageable, especially if you qualify for income-based repayment plans.
- Credit card debt: Carries higher interest rates, so it needs careful attention.
- Personal loans: Review your repayment terms.
- Car loans: Think about whether you’ll sell the car or keep it.
- Medical debt or collections: Know your monthly obligations.
Action Step:
Create a simple spreadsheet. List each debt, the monthly minimum payment, due dates, and interest rates. This will help you make smarter choices as you plan.
Can You Afford to Move?
Next, ask yourself an important question:
Can I cover my debt payments and afford life abroad at the same time?
To find out, you’ll need to estimate your cost of living in another country. (If you need help with this, check out Episode 64, “Budgeting: How Much Do You Really Need to Move Abroad?”)
If your answer is yes, you’re in a great place to move forward. If not, don’t worry. There are steps you can take:
1. Lower Your Cost of Living
Consider moving to a country where your money goes further. Portugal, the Czech Republic, Spain, or Italy are great examples.
In many cases, renting a studio in Lisbon or Valencia can cost much less than your current rent in the U.S.
2. Increase Your Income
Remote work or freelancing can provide more financial security abroad.
Many people teach English online, freelance in their field, or work for U.S. companies while living in Europe.
3. Save a Financial Runway
Aim to save three to six months of living expenses before moving. This buffer can protect you if something unexpected happens, keeping debt payments manageable.
Managing Debt Responsibly While Abroad
Living abroad with debt can be done responsibly. Here’s how to stay on track:
1. Set Up Autopay and Online Management
Before you leave, make sure you can log into all your financial accounts.
Keep your U.S. phone number, or get a low-cost U.S. number option.
Set up autopay for your minimum payments or full statement balances.
Consider using budgeting apps like You Need A Budget (YNAB) or Revolut if you’re living in Europe.
2. Open an International-Friendly Bank Account
Use services like Wise (my personal favorite and app I use all the time!) or Revolut to transfer money across currencies with low fees.
It’s also smart to have a U.S. bank account dedicated just to debt payments.
Each month, send money from your international account to your U.S. account and maintain a small USD buffer for peace of mind.
3. Track Your Income and Debt Monthly
Review your budget every month. If your income changes or an unexpected cost comes up, you’ll be ready to adjust without stress.
4. Schedule Financial Check-Ins
Set a reminder to check your finances every two weeks or at least once a month.
Ask yourself: Am I still on track? Does anything need adjusting?
You may find some costs (like groceries or healthcare) cheaper abroad and others (like eating out) a little higher, so your budget might need small tweaks after you move abroad.
Mindset Shift—Debt Does Not Define Your Future
It’s easy to think you need to “get your life together” before making a big move. But it’s really not true!
You don’t need to be debt-free to move abroad.
What you need is a plan and the willingness to follow it.
Moving abroad is not about escaping problems. It’s about creating a life that lights you up. You can handle debt responsibly while living the life you’ve been dreaming about.
Final Thoughts: Can You Move Abroad with Debt?
Yes, you can.
Will it require planning? Definitely.
Does having debt make you irresponsible? Absolutely not.
Here’s what you should do next:
- Create a clear debt inventory
- Build a budget that includes your debt payments and living expenses
- Look for destinations where your money stretches further
- Consider remote work or freelance options to supplement your income
- Move forward carefully and with intention
If this post helped you, please share it with a friend who dreams of moving abroad but feels stuck because of their finances. You never know who needs that encouragement!
Thanks for reading—and I’ll see you next time!
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